21 October 2021 | By Marten Männis
OECD competition law recommendations include legal privilege
On 6 October 2021, at the Meeting of the Council at Ministerial Level, the Organisation for Economic Co-operation and Development (OECD) adopted a Recommendation on Transparency and Procedural Fairness in Competition Law Enforcement. The recommendation comes with the goal to have a clear legal framework for competition law enforcement, with clearly defined and publicly available competition laws and regulations, in addition to other soft law instruments. The eight points of recommendation include a point on legal privilege, an element that ECLA sees as inherent to the proper functioning of European corporate lawyers.
Point 1 recommends members to ensure that competition law enforcement is transparent and predictable. This includes having the appropriate legal framework and procedures to be publicly available. Furthermore, members should publish the necessary elements of a decision, including facts, legal basis and more, subject to the notion of confidentiality. Transparency should be promoted and supported.
Point 2 recommends that competition law enforcement be independent, impartial, and professional. Members should achieve this by adhering to accountability, free from political interference, that competition law be enforced based on relevant legal and economic arguments, have rules in place to address conflicts of interest. In addition, relevant authorities should have sufficient resources and expertise to conduct competition law enforcement. Point 3 follows the previous Point by recommending members to ensure that competition law enforcement be non-discriminatory, consistent, and proportionate. This includes having consistent rules and guidelines in place for procedural steps in competition law enforcement. Furthermore, communications between the relevant authorities and parties in question should be in writing.
Point 4 recommends ensuring timely enforcement. Point 5 recommends members to ensure that parties involved are informed appropriately and have an adequate opportunity to engage in the enforcement process. This includes clear communication at the procedural steps, including when an investigation is opened, its legal basis and subject matter, and providing parties with meaningful opportunities at key stages to discuss the investigation with the relevant authorities and provide an opportunity for the parties to present an adequate defence.
Point 6 recommends members to protect confidential and privileged information and specifically ensure that competition authorities appropriately protect against unlawful disclosure of confidential information they possess. Furthermore, members should consider developing, updating, or strengthening policies regarding privileged communications, respecting applicable legal privileges.
Point 7 concerns access to an impartial review by an adjudicative body, independent from the relevant competition authority. Lastly, Point 8 recommends members to periodically review their legal framework, policies, rules and guidelines to ensure that the recommendations put forth in this document are respected.
Highlighting legal privilege under Point 6 as a separate recommendation clearly demonstrates the importance that privileged communications hold in a fair and impartial investigation. It should be noted that a clear majority of the 38 OECD member states recognise legal professional privilege for in-house counsel. Thus, the recommendation under Point 6 must be viewed through the scope of encompassing legal professional privilege for in-house counsel as well. As this is the view of most member states, the notion of implementing international competition law enforcement rules and best practices, as brought out under Point 1, should also include legal privilege for corporate counsel.
As seen in recent European developments, corporate counsel across jurisdictions are steadily gaining the same rights bestowed on outside counsel. The arguments put forth in Akzo Nobel regarding the impartiality of in-house lawyers are clearly not in line with practice and do not reflect how legal departments operate. Furthermore, the same argument of impartiality can be extended to outside counsel who focus primarily on a single large client, or in other scenarios where a client’s revenue impacts the bottom line. That the argument on impartiality is unfounded can also be seen on the increasing support for extending legal privilege for in-house lawyers, whereby the opposition for it has been steadily waning.
Over the past decade, numerous European jurisdictions have moved closer to having in-house counsel be considered equal to outside counsel before the law. Thus far, there have not been any substantive or sensible arguments against extending legal privilege and ECLA welcomes the fact that European jurisdictions have been starting to recognise it. As extending legal privilege would greatly increase the competitiveness of these jurisdictions in an international setting, bridging the gap between common law countries, ECLA has been active in promoting this trend and expects this to continue.